Markit, a leading provider of independent data, portfolio valuations and over-the-counter (OTC) derivatives trade processing, today announced the integration of its cashflow models with asset/liability management (ALM) analytics provider ZM Financial Systems’ newly launched online ALM website.
Banks and institutional investors use Markit’s cashflow models to evaluate collateralized mortgage obligations (CMOs) and asset-backed securities (ABS), and to manage interest rate, prepayment and default risk in fixed income portfolios. The integration of Markit’s cashflow models with ZM Financial Systems’ onlineALM solution creates a powerful tool that will allow ALM professionals to assess balance sheet risk accurately over a range of interest rate assumptions.
Ben Logan, managing director of Structured Finance at Markit, said: "In an environment where investors increasingly require a timely and comprehensive understanding of the cashflow characteristics of their CMO and ABS holdings, Markit’s cashflow models allow clients to manage risk more effectively and with greater accuracy. By making our cashflow models available on ZM Financial Systems’ onlineALM platform, we will strengthen Markit’s presence in the ALM market where many financial institutions already rely on our data and analytics tools."
Frank "Butch" Miner at ZM Financial Systems, said: "With access to Markit’s cashflow models, our onlineALM users will gain accurate CUSIP-level modeling of structured investments resulting in better interest rate risk reporting and more strategic, profitable balance sheet decisions."
Markit’s cashflow modeling is part of a global structured finance product set that includes reference and performance data, trade support tools such as a CDS of ABS trade settlement calculation service, and pricing services for European cash ABS and global synthetic ABS positions. Markit is also the owner of the Markit ABX.HE, a traded synthetic index of U.S. home equity ABS that has become a closely watched indicator in the structured finance markets, and the Markit CMBX, a traded synthetic index of U.S. commercial mortgage-backed securities.